– with Irma Isip
THE Securities and Exchange Commission (SEC) said lending and financing companies should adopt measures that will help borrowers cope with the impact and challenges brought about by the new coronavirus pandemic.
The SEC has released a number of possible debt relief measures that financing and lending companies may adopt, such as lowering of interest rates, loan term extension, suspension of collection, payment holiday, debt consolidation as well as waiver or reduction of penalties, charges and other fees, in order to help borrowers.
“Financing and lending companies may also develop and implement their own programs or schemes that will provide financial relief to their borrowers,” it said.
Emilio Aquino, SEC chairman, said the agency’s Corporate Governance and Finance Department is communicating directly with financing and lending companies, which have been the subject of numerous complaints from the public, to urge them to adopt schemes that will help their borrowers.
“We call on financing and lending companies to adopt all possible measures that will help ease the burden of their borrowers amid this public health emergency, which has disrupted the everyday lives of Filipinos, including their livelihoods,” said Aquino.
Aquino noted that a number of financing and lending companies have already adopted debt relief measures.
“For one, the Philippine Finance Association has informed the Commission that at least 18 of its members have allowed the extension of payment deadlines, without penalties and fees, for borrowers,” he said.
SB Corp. responds
The Small Business Corp. (SB Corp.) said it is setting up a P1-billion Enterprise Rehabilitation Financing facility under the Pondo sa Pagbabago at Pag-asenso in response to the COVID-1.
Named Covid19 P3-ERF, the facility will be implemented once the community quarantine declaration is lifted by the national government and/or respective local government units.
SB Corp. said the ERF loan fund is open to micro and small enterprises (MSEs) with at least one-year continuous operation prior to March 2020, and whose businesses suffered drastic reduction in sales during the ensuing epidemic.
Micro enterprises with asset size of not more than P3 million may borrow P10,000 up to P200,000 and small enterprises with asset size of not more than P10 million may borrow a higher loan amount but will not exceed P500,000
The loan shall be used to help the enterprise stabilize or recover from its losses. Specifically, the following purposes are qualified: updating of loan amortizations for vehicle loans or other fixed asset loans of the business; inventory replacement for perishable stocks damaged; and working capital replacement to restart the business.
Interest rate shall be at 0.5 percent per month (discounted basis); and grace period on payments shall be given until such time that the economic crisis has abated.
SB Corp. is also offering a one-month moratorium on loan payments covering the period of March 16 to April 14, 2020 to its micro, small and medium (MSME) borrowers and partner financial institutions.
Eligible to apply for the moratorium are those situated within the areas declared under community quarantine due to the COVID-19 virus lockdown.
Borrowers may also request to pay only the interest portion of their monthly payments for the succeeding six months, and to resume their regular monthly payments thereafter. Loan terms may also be extended depending on how the current situation develops.
